Windfall taxes cut on diesel, scrapped on ATF; Crude cess up a tad

Windfall taxes cut on diesel, scrapped on ATF; Crude cess up a tad

Auto fuel exporters like Reliance Industries will gain as the government limited the windfall tax on such shipments to just a Rs 5/litre levy on diesel in its second review of these taxes introduced on July 1, taking into consideration the fall in their refining spreads.

However, it raised the new additional excise duty (cess) on petroleum crude marginally from Rs 17,000 to Rs 17,750 per tonne, as the trade parity prices followed by domestic oil producers like ONGC and OIL rose marginally since mid-July, in line with the global crude prices.

The tax on ATF has now been removed.

“Refining spreads have come down and hence the change in export taxes,” revenue secretary Tarun Bajaj told FE.

The taxes will move either way depending on crude prices and crack spread. Crack margins refer to the difference between the purchase price of crude oil and the selling price of finished products, such as diesel, that a refinery produces from the crude oil. While crude prices have been stable with Brent at around $100-103/barrel, cracks have declined.